Nightingale H1'26: Research projects accelerate H2

Translation: Original published in Finnish on 03/06/2026 at 07:00 am EET

Source: Inderes

Nightingale's H1 fell short of expectations in terms of figures, which was largely explained by the revenue recognition of research projects only in H2. According to the company, rapid progress is being made beneath the surface, but important healthcare partnerships, except for the Terveystalo collaboration, still appear to be at a very early stage. H2 appears to be strong, supported by major research projects, and management also expects new successes during the current period. We lower our target price to EUR 1.7  (was EUR 2.5) following our estimates and raise our recommendation to Accumulate (was Reduce), as the recent sharp share price decline has turned the risk/reward ratio attractive.

Major research projects will only materialize in H2

Nightingale’s revenue in fiscal H1'26 (7-12/2025) increased by 4% to 2.4 MEUR (Inderes: 3.7 MEUR, 7-12/2024: 2.3 MEUR). The recognition of income from major research projects will occur in H2, which explains the difference to our estimates. Healthcare partnerships progressed slowly from a commercial perspective, even though, according to management, a lot is happening behind the scenes. Operating expenses were slightly lower than expected, so earnings were largely in line with our forecast despite lower revenue. H1 EBIT was EUR -8.8 million (Inderes: -8.9 MEUR, 7-12/2024: -9.1 MEUR). Cash burn (approx. 9.7 MEUR/6 months) remained at a high level. Net cash remains strong at 38 MEUR, but the rate of cash burn raises preliminary concerns.

Growth still primarily driven by research projects

Nightingale's short-term revenue relies on research customers, where it has succeeded in securing large research projects (Aalborg University 2.4 MEUR, Moli-Sani 0.7 MEUR). According to the company's comments, the sales pipeline for clinical projects became more balanced relative to the sales pipeline for research projects during H1. The most advanced healthcare client relationship is the cooperation with Terveystalo. Other healthcare partnerships are still in the piloting or very early commercial stage. However, based on the company's comments, the sales pipeline is strong, and in light of this, new clinical customers can be expected as early as H2. Based on current information, the commercial ramp-up of customer accounts will take at least a few years, which keeps our growth expectations moderate for the coming years.

We revise our medium- and long-term estimates downwards

Large research projects will generate revenue in H2, so we reiterate our full-year 2026 estimate, which is also in line with the company's targeted growth of over 50%. Our mid-term estimates decrease by 8-11% due to the slow progress in the healthcare segment. We also revise our longer-term estimates downwards for the same reason. We believe that with current information, our estimates rely on a realistic but still very high-risk scenario of the company's business growth continuing for a long time. This requires new healthcare partnerships and existing customer accounts to turn to clear growth.

The share price decline has improved the risk/reward ratio

Based on our DCF model, the share value is EUR 1.7. Nightingale’s fundamental-based valuation is challenging, as possible scenarios vary between destruction and multiplication of invested capital. With current data, our fair value estimate range for the share is wide, EUR 0.7-5.3. Investors must believe in the company's global commercial breakthrough, take a long-term view of the stock, and accept the risk of capital loss. We believe that the limited visibility into growth warrants pricing in the lower half of the range. After a sharp share price decline, we see the risk/reward as cautiously attractive.